Las Vegas-based MGM Resorts International(NYSE:MGM) said
on Thursday that it has obtained $5 billion in financing, sending its shares
up.
The company launched a tender offer to repay more than
$3 billion in existing debt due over the next several years with proceeds from
a new $4 billion senior secured credit facility and $1 billion in new unsecured
notes.
The debt which MGM Resorts has to repay includes $750
million of 13 percent senior secured notes due 2013, $650 million of 10.375 percent
senior secured notes due 2014, $850 million of 11.125 percent senior secured
notes due 2017 and $845 million of 9 percent senior secured notes due 2020.
Shares in the company rose $1, or 10 percent, to $10.97
in heavy trading after peaking at $10.99 earlier in the day. Over the past 52
weeks, the company's shares have traded between $8.83 and $14.94.
The announcement was followed by rating firm Standard
& Poor's raising its non-investment grade corporate credit rating for the
company to "B+" from "B-."
It said that while MGM will still have a high level of
debt, the refinancing will lower its interest costs and help generate cash flow
that it can use to repay more debt down the road.
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